GST and the supply of an electrically operated reclining chair

Is the entity, a supplier of medical aids and appliances, making a GST-free supply under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies an electrically operated reclining chair specifically designed to assist people with disabilities in achieving a standing position with greater ease?

Yes, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies an electrically operated reclining chair specifically designed to assist people with disabilities in achieving a standing position with greater ease.

The entity is a supplier of medical aids and appliances. The entity is supplying an electrically operated reclining chair.

The chair operates by electronic elevation. The chair is designed to assist elderly or disabled people with knee, leg or hip problems, in achieving a standing position with greater ease. In addition, the chair has a therapeutic design feature whereby the chair reclines to a horizontal position and lifts the user's legs above the heart to aid circulation.

The chair is not widely used by people without an illness or disability.

There is no agreement between the entity and the recipient that the supply will not be treated as a GST-free supply.

The entity is registered for goods and services tax (GST).

Under subsection 38-45(1) of the GST Act, the supply of certain medical aids and appliances is GST-free where the medical aid or appliance: • is covered by Schedule 3 to the GST Act (Schedule 3), or specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations); • is specifically designed for people with an illness or disability; and • is not widely used by people without an illness or disability.

Item 86 in the table in Schedule 3 (Item 86) lists 'electrically operated therapeutic lounge/recliner chairs specifically designed for people with disabilities'. The chair is an electrically operated reclining chair. The question is whether the chair is specifically designed for people with disabilities.

The chair is designed to assist people with knee, leg or hip problems in achieving a standing position. It is also designed to aid circulation. Therefore, the chair is specifically designed for people with disabilities and is covered by Item 86.

Furthermore, the chair is not widely used by people without an illness or disability. Therefore, as all of the requirements of subsection 38-45(1) of the GST Act have been met, the entity is making a GST-free supply under subsection 38-45(1) of the GST Act when it supplies the electrically operated reclining chair specifically designed to assist disabled people in achieving a standing position with greater ease.